Beyond Westminster: A Global Perspective on Public Governance and Accounts Edited by: RICK STAPENHURST AND BROOKE LARSON Beyond Westminster: A Global Perspective on Public Governance and Accounts About This Publication Beyond Westminster: A Global Perspective on Public Governance and Accounts addresses the factors that contribute to public accounts committee (PAC) effectiveness in countries around the world. With the analyses and insights of eight authors, the publication looks at countries in 10 regions. Specifically, it examines PACs’ effectiveness through the lens of three determinants: opportunity, capacity, and motivation. At the Canadian Audit and Accountability Foundation, we have engaged in substantial research on the role and functioning of an effective Public Accounts Committee, which along with the institution of the Auditor General plays an integral role in oversight in Commonwealth countries. We believe this publication contributes valuable knowledge and insight in this important area. While this is not a CAAF publication, we are making it available as part of our commitment to knowledge sharing with our members and the broader oversight community. About the Canadian Audit and Accountability Foundation The Canadian Audit and Accountability Foundation is a premier Canadian research and education foundation. Our mission is to strengthen public sector performance audit, oversight and accountability in Canada and abroad. We build capacity in legislative audit offices, oversight bodies, and departments and crown corporations by developing and delivering: § Training workshops and learning opportunities; § Methodology, guidance and toolkits; § Applied and advanced research; § Information sharing events and community building initiatives. Visit us at www.caaf-fcar.ca for more information about our products and services. Published by: Canadian Audit and Accountability Foundation 1505 Laperriere Avenue, Suite 100 Ottawa, Ontario CANADA K1Z 7T1 Tel: 613-241-6713 www.caaf-fcar.ca/en ISBN: 978-1-926507-24-8 Page 2 Beyond Westminster: A Global Perspective on Public Governance and Accounts This book is dedicated to Kerry Jacobs, whose thoughtful insights and comments inspired both the authors and editors of this book Page 3 Beyond Westminster: A Global Perspective on Public Governance and Accounts Table of Contents Chapter 1 Introduction ................................................................................................................................. 5 Chapter 2 The Parliamentary Public Accounts Committee: A British Isles Perspective ................................... 14 Anthony Staddon Chapter 3 Financial Oversight, Public Accounts Committees, and the European Union ................................ 31 Kerry Jacobs Chapter 4 The Parliamentary Public Accounts Committees in the Nordic Countries and Regions—Denmark, Faroe Islands, Finland, Greenland, Iceland, Norway, Sweden, and Aaland Islands ......................................... 40 Gitte Korff Chapter 5 Parliamentary Oversight and Public Accounts Committees in East Africa: A Review of Recent Research ...................................................................................................................................................... 58 Rick Stapenhurst Chapter 6 Public Accounts Committee: Perspectives from West Africa ........................................................ 71 Rasheed Draman Chapter 7 Public Accounts Committees in Southern Africa .......................................................................... 82 Vineeth Atreyesh Vasudeva Murthy Chapter 8 Public Accounts Committees: A South Asian Perspective ........................................................... 109 Rick Stapenhurst and Brooke Larson Chapter 9 Public Accounts Committees in the Pacific Region .................................................................... 121 Rick Stapenhurst Chapter 10 The Parliamentary Public Accounts Committee in the Antipodes: Australia and New Zealand .. 138 Kerry Jacobs Chapter 11 Public Accounts Committees in the Caribbean Region ............................................................ 149 Niall Johnston Chapter 12 An Assessment of Public Accounts Committee Operations and Procedures in Nigeria ............. 159 Oladeji Olaore Chapter 13 Conclusions ............................................................................................................................ 185 Page 4 Beyond Westminster: A Global Perspective on Public Governance and Accounts Chapter 1 Introduction Legislatures perform three functions—representative, legislative, and oversight—with the latter ensuring that governments implement policies and programs in accordance with the wishes and intent of the citizens. They undertake this oversight function in two ways: ex ante (overseeing the preparation of a given policy) and ex post (overseeing the execution and the implementation of a given policy). This dichotomy can be illustrated in the budget process. Legislatures are involved in the ex-ante drafting and legislative phases of the process and in the ex post implementation and audit phases of the budget process (see figure 1.1). This book is primarily concerned with the ex post legislative oversight of the budget process. Figure 1.1 Stages of theStages annual of the budget annual processbudget process ! Finance ministry or ! Budget tabled in the ! Funds apportioned to ! Supreme audit institution treasury issues legislature spending departments to assesses departmental guidelines to spending ! Consideration by implement activities accounts and departments or agencies parliamentary ! Finance ministry performance ! Spending departments committee(s) monitors spending ! Audit reports published submit draft budgets ! Parliament accepts, ! Request for legislative and reviewed by ! Negotiation and final amends or rejects the approval of adjustment parliament decisions by executive budget budget if necessary Drafting Legislative Implementation Audit Before beginning of relevant fiscal year Fiscal year starts and ends Following end of fiscal year ! Source: Wehner 2004. Stapenhurst, Jacobs, and Pelizzo (2014) note that there is considerable variation in the legislative tools that legislatures can employ to perform their ex post oversight function. This variation largely reflects differences in constitutional arrangements and, in particular, the type of government. The legislative tools used to undertake such oversight include parliamentary committees, questions in the legislature, interpellations, debates, the estimates process, scrutiny of delegated legislation, private members’ motions, and adjournment debates, along with extra-parliamentary tools such as supreme audit institutions and ombuds offices. Together, these tools allow legislators to raise issues relating to the use of governmental power, to call upon the government to explain actions it proposes to take or has taken, and to require government to justify its policies or administrative decisions (Pelizzo and Stapenhurst 2004a; Pelizzo and Stapenhurst 2004b). One of the tools that a legislature can use, especially in its ex post oversight of the budget, is a specialized audit committee often known as the public accounts committee (PAC). Whereas the first PAC was constituted in Norway in 1814, the archetype PAC is associated with the model that originated in the 19th- century British Parliament. In Britain, the House of Commons had wrested control of finance from the crown by the 17th century (Chubb 1952). However, it was in the 19th century that control was more developed, Page 5 Beyond Westminster: A Global Perspective on Public Governance and Accounts and, in 1862, the British PAC was established by the then Chancellor of the Exchequer, William Gladstone. Gladstone’s proposal for membership to the PAC essentially required a sound understanding of public sector financial management and accountability—a requirement that remains relevant today. Just as legislatures need useful information to perform their oversight and other functions effectively (Frantzich 1979), so PACs need information to perform their task effectively. This information is generally provided by the legislative auditor, or auditor general. In the British (or more commonly, the Westminster) model, the auditor reports to the legislature (and the public at large) on whether public sector resources are appropriately managed and accounted for by the executive government and his or her reports are used as the cornerstone of the work of PACs (Stapenhurst, Jacobs, and Pelizzo 2014). The exact nature of the (often symbiotic) relationship between the legislature and the auditor varies considerably. In most Commonwealth countries, the auditor general is a core element of parliamentary oversight and he or she may report directly to parliament and the PAC. In some countries, such as Australia and Canada, the auditor general is an officer of parliament, which guarantees his or her independence from the executive, whereas in some other countries, he or she is independent of both the executive and the legislature, as is the case in India. PACs are generally seen as the apex for financial scrutiny and have been promoted as a crucial mechanism to facilitate transparency in government financial operations (see figure 1.2). Figure 1.2 Fiduciary Obligation Despite common origin in the British PAC, there is considerable variation in PACs’ terms of reference and modus operandi around the world. Recent research (Stapenhurst and others 2005; Pelizzo and Stapenhurst